All companies face a number of different challenges. However, it has become increasingly important for a company to enhance the experience for each customer interacting with it. For example, customer churn, or the circumstance of losing a customer, can be very costly, as it may be many times more expensive to acquire a new customer than to keep an existing one. Thus, companies are seeking ways to retain customers by offering a superior experience, while delivering unique experiences to different customer segments.
In many industries, a relatively small percentage of customers represent a majority of a company's revenue, so a company will invest in the experience offered to high-value customer segments to enhance profitability. Customers today are empowered with information, and they evaluate their relationship with the company with respect to their own unique needs. However, companies often lack a rich set of data about customer behavior and insights. Without a way to collect a robust set of customer data, a company may be inclined to monitor only what is easy to measure, and will usually not develop deep insights derived from customer interactions.
Loyalty management can be implemented by systems across multiple industries where customer loyalty programs are utilized to build customer relationships and to promote specific customer behaviors. Loyalty management enables marketers to plan and execute closed loop loyalty programs, such as frequent flyer programs, for example. These programs can promote customers participation through points/reward programs where certain amounts of points are earned for a specific customer behavior. In turn, customers can redeem these points for specified rewards.
Loyalty programs helps to promote specific customer behaviors by providing benefits (such as rewards for miles flown) which can help enhance the customer experience. While companies often view such point-based programs as a fast way to enhance profitability by inducing customers to buy their goods or services, they are finding that there is a much greater value provided by more comprehensive loyalty programs that rely on the collection of information from program members. Companies can then use this data to develop a 360-degree view of customer interactions and determine how best to tailor process enhancements by segment—particularly for high-value customers. By implementing loyalty programs that are integrated across sales, service, and marketing—i.e., across all channels of interaction—a firm can greatly enhance the customer experience, increase customer retention, and foster the development of a community of people who serve as advocates for the business.
A single loyalty management system for real world customers is not conventionally deployed due to existing complex CRM landscapes and complex business processes, which are spread across multiple systems. Customers are reluctant to expose their critical data outside their own firewall, so they usually segregate the external facing UI and keep the data separately. Presently, in multiple CRM and ERP systems, i.e. when the UI is one system, the business logic is in another system, and the data is stored across multiple systems, there is no standard framework that can be used to communicate between these multiple CRM systems and ERP systems.